News by State

The Bureau of Ocean Energy Management
(BOEM) recently issued a Notice to Lessees and Operators (NTL) detailing how
the bureau plans to update its financial assurance and risk-management
requirements for companies holding oil and gas leases in federal waters to ensure lessees can cover the decommissioning costs of their facilities and that taxpayers will never foot the bill.

“BOEM’s goal is to modernize its approach
to risk management in a way that better aligns with the realities of the
industry and protects the U.S. government and taxpayers from risk in a manner
that isn’t overly burdensome to the oil and gas industry,” BOEM Director Abigail
Ross Hopper said. “By implementing these changes, we will create comprehensive
procedures to decrease risks to taxpayers while providing industry flexibility
to negotiate adaptive solutions and use tailored financial plans to meet their
financial assurance requirements.

The updated requirements include improved
procedures to determine whether lessees can fulfill the obligations of their
leases, all of which include requirements to remove all facilities and return
sites to their original state.

“BOEM’s financial-assurance regulations
need to take into account current industry practices,” Hopper said. “We must
ensure the U.S. taxpayer never pays to decommission an OCS facility and that
the environment is protected. Managing risk in the early stages of a lease will
provide lessees negotiated solutions that improve business certainty and
leverage existing company strengths.”

American Security News provides daily reporting on policy issues and
news related to the national defense of the United States. This includes
Congressional and White House policies, defense industry news, Armed
Forces developments, and ongoing updates from the War on Terror.